Question 1

The table shows labor demand data on the left and labor supply data on the right. How many units of output will this profit-maximizing firm produce?

Accepted Answer

A)  55
B)  48
C)  28
D)  39E) B) and D)
F) A) and B)

Question 2

Do unions have a positive or negative effect on economic efficiency?

Accepted Answer

Union wages are about 15 percent higher ...

Question 3

The table shows labor demand data on the left and labor supply data on the right. We can conclude that

Accepted Answer

A)  the product market is imperfectly competitive and the labor market is monopsonistic.
B)  the labor market is monopsonistic, but the product market is purely competitive.
C)  both the labor and product markets are purely competitive.
D)  the labor market is purely competitive, but the product market is monopsonistic.E) All of the above
F) A) and B)

Question 4

Suppose two workers can harvest $46 worth of apples per day and three workers can harvest $60 worth. On the basis of this information, we can say that the

Accepted Answer

A)  marginal product of each of the first two workers is 23.
B)  marginal revenue product of each of the first two workers is $23.
C)  marginal revenue product of the third worker is $14.
D)  third worker should not be hired.E) A) and D)
F) All of the above

Question 5

In recent years, total compensation to workers has risen faster than the take-home pay of average workers. This implies that

Accepted Answer

A)  something is wrong with the statistics on either compensation or take-home pay.
B)  fringe benefits have become a larger share of total worker compensation.
C)  direct payments have become a larger share of total worker compensation.
D)  workers' pay has been declining slightly in recent years.E) All of the above
F) A) and C)

Question 6

A profit-maximizing firm operates in purely competitive product and resource markets, with the resource and production schedules shown in the table.  The product price is $15 per unit and the cost per worker is $540. How many workers will the firm employ?

Accepted Answer

A)  5
B)  6
C)  8
D)  7E) A) and B)
F) A) and C)

Question 7

Refer to the given data. The marginal revenue product of the second worker is

Accepted Answer

A)  $9.
B)  $24.
C)  $12.
D)  $8.E) A) and D)
F) A) and C)

Question 8

The real wage will rise if the nominal wage

Accepted Answer

A)  falls more rapidly than the general price level.
B)  increases at the same rate as labor productivity.
C)  increases more rapidly than the general price level.
D)  falls at the same rate as the general price level.E) None of the above
F) C) and D)

Question 9

Refer to the given data. At the profit-maximizing level of employment, this firm's total revenue will be

Accepted Answer

A)  $16.
B)  $30.
C)  $24.
D)  $32.E) C) and D)
F) B) and D)

Question 10

The concept of "wages" includes the following items, except

Accepted Answer

A)  direct money payments like salaries and commissions.
B)  bonuses and royalties.
C)  amounts spent by workers.
D)  fringe benefits like health insurance and paid leave.E) A) and B)
F) A) and C)

Question 11

Explain the principal-agent problem in job performance and list the actions that can be taken to correct the problem.

Accepted Answer

The principal-agent problem at a firm is...

Question 12

What explanations are offered for why unions have declined?

Accepted Answer

There have been structural changes in th...

Question 13

Human capital investment refers to spending on education and worker training.

Accepted Answer

A) True 
 B)False

Question 14

Refer to the given data. In maximizing its profit, this firm will employ

Accepted Answer

A)  1 unit of labor.
B)  2 units of labor.
C)  3 units of labor.
D)  4 units of labor.E) A) and B)
F) B) and D)

Question 15

List and explain the factors that lead to a high level of productivity in the United States.

Accepted Answer

Plentiful capital-workers in the United ...

Question 16

In a purely competitive labor market, an individual firm must pay a rising price for labor if it wants to acquire more labor.

Accepted Answer

A) True 
 B)False

Question 17

Right-to-work laws prohibit the formation of labor unions.

Accepted Answer

A) True 
 B)False

Question 18

What is the rationale for efficiency wages? How do efficiency wages help address the principal-agent problem?

Accepted Answer

The rationale behind efficiency wages is...

Question 19

African Americans have higher unionization rates than whites.

Accepted Answer

A) True 
 B)False

Question 20

What is the difference between nominal wages and real wages?

Accepted Answer

The nominal wage is the amount of money ...

Exam 17: Wage Determination

List and explain the factors that lead to a high level of productivity in the United States.

Correct AnswerverifiedPlentiful capital-workers in the United ...View AnswerShow Answer

What is the rationale for efficiency wages? How do efficiency wages help address the principal-agent problem?

Correct AnswerverifiedThe rationale behind efficiency wages is...View AnswerShow Answer

Refer to the given data. The marginal revenue product of the second worker is

Correct AnswerverifiedShow Answer

What explanations are offered for why unions have declined?

Correct AnswerverifiedThere have been structural changes in th...View AnswerShow Answer

Explain the principal-agent problem in job performance and list the actions that can be taken to correct the problem.

Correct AnswerverifiedThe principal-agent problem at a firm is...View AnswerShow Answer

Refer to the given data. At the profit-maximizing level of employment, this firm's total revenue will be

Correct AnswerverifiedShow Answer

The table shows labor demand data on the left and labor supply data on the right. We can conclude that

Correct AnswerverifiedShow Answer

African Americans have higher unionization rates than whites.

Correct AnswerverifiedShow Answer

The concept of "wages" includes the following items, except

Correct AnswerverifiedShow Answer

The table shows labor demand data on the left and labor supply data on the right. How many units of output will this profit-maximizing firm produce?

Correct AnswerverifiedShow Answer

A profit-maximizing firm operates in purely competitive product and resource markets, with the resource and production schedules shown in the table. The product price is $15 per unit and the cost per worker is $540. How many workers will the firm employ?

Correct AnswerverifiedShow Answer

Refer to the given data. In maximizing its profit, this firm will employ

Correct AnswerverifiedShow Answer

Do unions have a positive or negative effect on economic efficiency?

Correct AnswerverifiedUnion wages are about 15 percent higher ...View AnswerShow Answer

In recent years, total compensation to workers has risen faster than the take-home pay of average workers. This implies that

Correct AnswerverifiedShow Answer

Right-to-work laws prohibit the formation of labor unions.

Correct AnswerverifiedShow Answer

In a purely competitive labor market, an individual firm must pay a rising price for labor if it wants to acquire more labor.

Correct AnswerverifiedShow Answer

Suppose two workers can harvest $46 worth of apples per day and three workers can harvest $60 worth. On the basis of this information, we can say that the

Correct AnswerverifiedShow Answer

What is the difference between nominal wages and real wages?

Correct AnswerverifiedThe nominal wage is the amount of money ...View AnswerShow Answer

Human capital investment refers to spending on education and worker training.

Correct AnswerverifiedShow Answer

The real wage will rise if the nominal wage

Correct AnswerverifiedShow Answer

Correct Answer
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Plentiful capital-workers in the United ...
View Answer

Correct Answer
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The rationale behind efficiency wages is...
View Answer

Correct Answer
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Correct Answer
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There have been structural changes in th...
View Answer

Correct Answer
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The principal-agent problem at a firm is...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Union wages are about 15 percent higher ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The nominal wage is the amount of money ...
View Answer

Correct Answer
verified

Correct Answer
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